Peacebird(SH:603877) Changjiang Securities·2024-11-12 06:37Investment Rating - The report maintains a "Buy" rating for Taiping Bird (603877 SH) with expected net profits of 300 million, 370 million, and 440 million yuan for 2024, 2025, and 2026 respectively, and P/E ratios of 21X, 17X, and 15X [2] Core Views - Taiping Bird's Q3 2024 performance continued to face pressure, with revenue, net profit, and non-GAAP net profit at 14 billion, -60 million, and -70 million yuan respectively, representing a year-on-year decline of 13 9%, an increase in losses of 20 million, and an increase in losses of 30 million [3] - The company's retail performance remained weak across brands and channels, with PB Women's, Men's, Ledin, and Children's wear revenues declining by 14 0%, 9 0%, 21 9%, and 23 2% respectively [3] - The company continued to close inefficient stores, with 33 directly operated and 29 franchised stores closed in Q3, indicating a slowdown in optimization and nearing the end of the store closure phase [3] Financial Performance - Q3 2024 gross margin remained flat year-on-year, while the period expense ratio increased by 5 3 percentage points, mainly due to a 3 5 percentage point increase in the sales expense ratio [3] - The company's inventory at the end of Q3 2024 was 1 79 billion yuan, a year-on-year decrease of 7 9% but a quarter-on-quarter increase of 29 7%, likely due to higher-priced autumn and winter new product stockpiling [3] - Operating cash flow in Q3 decreased by 100 million yuan year-on-year, primarily due to reduced cash received from sales [3] Future Outlook - Short-term improvements are expected as store closures near completion, retail conditions gradually improve, and franchise gross margins recover, leading to enhanced cost control and potential profit growth [3] - Long-term growth is anticipated through structural adjustments, improved operational quality, and a shift from retail-driven profit elasticity to a more sustainable and stable profit model [3]